US seeks to block JetBlue, Spirit Airlines merger at trial

investing.com:

By Nate Raymond

BOSTON (Reuters) — The U.S. Department of Justice heads to trial on Tuesday to urge a federal judge to block JetBlue Airways (NASDAQ:JBLU)' planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines (NYSE:SAVE).

The case in federal court in Boston is part of a broad effort by President Joe Biden's administration to preserve competition among the lowest cost airlines, ensuring air travel remains affordable for many more US consumers.

The trial will take place without a jury over about three weeks before U.S. District Judge William Young. At a hearing in March, Young said he felt an «obligation» to try to rule by year's end.

A merger between JetBlue and Spirit, the sixth and seventh largest U.S. carriers, respectively, would mark the first major U.S. airline combination since Alaska Airlines bought Virgin America in 2016.

The sector is dominated by four U.S. carriers — United Airlines, American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and Southwest — who control 80% of the domestic market following a series of previous airline mergers, the Justice Department has said.

JetBlue has called the deal pro-consumer and has sought to ease U.S. regulators' antitrust concerns by agreeing to sell off Spirit's gates and slots at certain airports in New York City, Boston, Newark and Fort Lauderdale.

But the Justice Department has said those divestitures are not enough, and in a lawsuit filed in March argued the combined airline would harm consumers by increasing fares and reducing choice on routes nationwide.

The department is suing alongside Democratic attorneys general from six states and the District of Columbia. They call Spirit a «disruptive and innovative airline» whose low-cost, no-frills